Correlation Between FirstCash and Swiftmerge Acquisition

Can any of the company-specific risk be diversified away by investing in both FirstCash and Swiftmerge Acquisition at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining FirstCash and Swiftmerge Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FirstCash and Swiftmerge Acquisition Corp, you can compare the effects of market volatilities on FirstCash and Swiftmerge Acquisition and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in FirstCash with a short position of Swiftmerge Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of FirstCash and Swiftmerge Acquisition.

Diversification Opportunities for FirstCash and Swiftmerge Acquisition

-0.27

Correlation Coefficient

FirstCash  Swiftmerge Acquisition

Very good diversification

The 3 months correlation between FirstCash and Swiftmerge is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding FirstCash and Swiftmerge Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiftmerge Acquisition and FirstCash is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on FirstCash are associated (or correlated) with Swiftmerge Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiftmerge Acquisition has no effect on the direction of FirstCash i.e., FirstCash and Swiftmerge Acquisition go up and down completely randomly.

Pair Corralation between FirstCash and Swiftmerge Acquisition

Given the investment horizon of 90 days FirstCash is expected to generate 0.27 times more return on investment than Swiftmerge Acquisition. However, FirstCash is 3.69 times less risky than Swiftmerge Acquisition. It trades about 0.09 of its potential returns per unit of risk. Swiftmerge Acquisition Corp is currently generating about -0.08 per unit of risk. If you would invest  10,794  in FirstCash on October 25, 2024 and sell it today you would earn a total of  446.00  from holding FirstCash or generate 4.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	39.47%
Values	Daily Returns

FirstCash  vs.  Swiftmerge Acquisition Corp

FirstCash

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FirstCash are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, FirstCash may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Swiftmerge Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Swiftmerge Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with FirstCash and Swiftmerge Acquisition

The main advantage of trading using opposite FirstCash and Swiftmerge Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirstCash position performs unexpectedly, Swiftmerge Acquisition can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Swiftmerge Acquisition will offset losses from the drop in Swiftmerge Acquisition's long position.

The idea behind FirstCash and Swiftmerge Acquisition Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.